Online Gambling Tax Uk
Players are not required to pay taxes on winnings from online or land based casinos in the United Kingdom. UK gambling tax applies to casino operators, who are required to pay 2.5-40% of their gross gaming revenue. The United Kingdom has a wide variety of casinos, with around 24 in London, 13 in Scotland and 5 in Wales. Register for gambling tax File your gambling tax return Gambling Tax Service: online service guide for General Betting Duty, Pool Betting Duty and Remote Gaming Duty.
Did you know that your gambling winnings in the UK are tax-free? You will never be taxed when you make a bet, nor will you ever have a proportion of your winnings taxed. There’s also no need to report your winnings; whenever you win a sports bet or a casino game, you get to keep 100% of the amount stated.
Instead of taxing the players, the UK government has decided to tax only the operators of UK online casinos. Not great news if you were planning to open a casino, but it’s fantastic for any gambler looking to play at one of the best online casinos in the UK.
Players will always pay a grand total of £0 for any kind of transaction. The operators, on the other hand, will need to pay the government 15% of their profits. This might seem like a high amount, but in comparison to many other countries, this is actually quite a reasonable rate. Nonetheless, some have resorted to using tax havens to house their operations.
Was gambling always tax-free?
It wasn’t always this way. In the past, players were required to pay a tax whenever they gambled.
Before the 1960s, gambling was illegal, so any betting operations were run on the black market. So of course, in those days, the government didn’t receive any tax whatsoever from the industry. So gambling was technically tax-free.
Eventually, gambling was legalised and legitimate betting shops opened. At this point in time, players would have a 9% tax levied against them. When placing their bets, players would be given a choice: you could either apply the tax to your initial stake, or you could apply it to your winnings. The choice was yours.
The tax on players shrunk over time. At its lowest, players were only taxed at a rate of 6.5%.
When was the tax abolished?
Eventually, the tax system was abolished completely and we were left with the tax-free system we still have today. According to CasinoGuide UK, this policy was implemented in 2002 by Gordon Brown. At the time, Brown was still the Chancellor of the Exchequer, although he would later go on to be the Prime Minister.
Brown removed the tax because he wanted the British gambling industry to remain competitive on an international level. With the rise of internet gambling, foreign gambling sites threatened to take away business from the UK. The move was certainly a good one; the UK remains at the forefront of gaming to this day.
What about professional gambling?
Online Gaming Tax Uk
So if you make a living from gambling, surely you have to give the government a cut? Surprisingly, this actually isn’t the case.
Online Gambling Tax Laws
Even if you pay for all your living expenses using only your gambling winnings, you don’t need to report anything to the government. You don’t need to pay any tax on your income either. The UK government doesn’t recognize gambling as a taxable trade; therefore, professional gamblers are also lucky enough to be exempt from the tax!
Is tax-free gambling here to stay?
Online Gambling Tax Uk Online
At this point, it seems very unlikely a gambling tax on players will ever return to the UK shores. The tax was initially removed in order for the UK to remain competitive on the international stage.
Since 2002, more and more countries have gotten into the online gaming scene. As a result, the UK needs to stay competitive now more than ever.
On top of that, it would also be very difficult for the UK government to bring back the tax under their current taxation system. This is because the government would be required to give allowances to cover gambling losses. If the government is able to tax profit for an activity, they also need to provide allowances in the event that money is lost.
Not every country is the same
If you are someone who likes to make bets and visit casinos when you travel abroad, you should be aware that not every country is the same as the UK. In many countries – even ones in the EU – you are still required to pay a tax on your gaming. If you are traveling to a new country, make sure you always read up on the local laws and regulations.